We have seen many examples of efforts to improve efficiency and to reduce costs since the start of the great recession. We have witnessed firms conduct restructurings, enter into outsourcing arrangements, implement process reengineering, invest in IT and knowledge management systems, reshape partnerships and consider alternative business structures and external investment.

The core challenge, however, lies in developing strategy which is not centred on running the same race as everyone else, only faster or better. Such “me too” strategies in a law firm context are difficult to sustain in the longer term. This is because, within a peer group, incremental operational efficiencies can be relatively easily replicated and so any cost or profit advantage that has been achieved is fast eroded. The risk is that the reality of pursuing such strategies over an extended business cycle is simply a reduction in fees-charged per unit of activity in what fast becomes a race to the bottom. That is not to say that innovation in operational efficiency is not important but rather that it is unlikely to be sufficient.